Summary:
- The Big Beautiful Bill is more like a wrecking ball for low-income Americans, and it threatens to gut portions of the Affordable Care Act that expanded health insurance to millions of Americans.
- While the bill will be changed in the Senate, that chamber’s Republican leadership seems on board with many of the insurance cuts; Iowa Senator Joni Ernst defended Medicaid changes by telling her constituents, “all of us are going to die.”
The U.S. House of Representatives recently passed significant changes to Medicaid and the Affordable Care Act (ACA) as part of the One Big Beautiful Bill Act. Supporters say these changes are necessary to preserve health insurance coverage for the most vulnerable Americans by eliminating waste, fraud, and abuse.
In reality, the changes will arbitrarily and cruelly cause millions of working poor, disabled, and ill Americans to lose health insurance.
The House proposal would drop an estimated 13.7 million Americans — including 480,000 North Carolinians — from their insurance plans. They will lose coverage not because of waste, fraud, abuse, but because of unnecessary Medicaid red tape and steep rises in ACA premiums.
An estimated 8.7 million vulnerable Americans will lose Medicaid coverage through the imposition of burdensome, bureaucratic paperwork requirements. Historically, these requirements pose the biggest barrier to the working poor, the disabled, and less educated. Another 5-8 million will lose ACA coverage because they will be unable to afford hefty premium increases. These cuts will harm not only the 480,000-plus North Carolinians who will lose health coverage but all North Carolinians by increasing hospital closures and hindering our economy.
Massive Cuts in Health Coverage
Just before Memorial Day weekend, the House hastily passed the budget reconciliation bill along partisan lines by one vote. Though it will undoubtedly go through major changes in the Senate, the Big Beautiful Bill will impact every aspect of Americans’ lives. With over a 1000 pages of text and many last-minute amendments, few legislators knew more than the rough outlines of the bill, nor did they know the details of the 150 pages of complex, immense changes to Medicaid and the ACA.
The bill constructs numerous bureaucratic obstacles to Medicaid coverage that will slash enrollment. The bill also cuts an estimated $912 billion over ten years according to the Congressional Budget Office (an arm of Congress). As one would expect, cutting nearly one trillion dollars will result infewer insured Americans.
North Carolina would lose an estimated $2 billion a year in federal Medicaid funding alone, which our legislature isunlikely to make up in new taxes. These cuts would wipe out most of North Carolina’s progress in insuring more residents under our state’s recent Medicaid expansion.
These Devastating Cuts Will Harm All North Carolinians
These cuts will harm not only those who lose health coverage, but all of us in North Carolina. The 480,000 who lose health coverage are likely to die sooner, be sicker and work less. They also are less likely to enroll their children in Medicaid or CHIP, hindering their children’s education and development.
Without health coverage, these uninsured North Carolinians will delay treatment and end up in our emergency rooms, where their care will be more extensive and expensive. This uncompensated care will threaten the financial viability of our hospitals, especially in rural and small towns.
Rural and small hospitals have thin operating margins and cannot absorb the costs of treating many more uninsured. North Carolina is especially vulnerable to rural hospital closures and has lost more rural hospitals than any other state that has expanded Medicaid (only Texas and Tennessee have experienced more closures). Medicaid and ACA funds keep rural hospitals open, making sure all North Carolinians continue to have access to medical care regardless of where they live or their insurance coverage.
Future closures will cause many rural and small town residents to lose timely care. It also will hurt rural economies, as employers struggle to attract workers to areas without accessible health care.
Many North Carolinians Will Lose Coverage Because of Bureaucratic Hurdles
Many Americans and North Carolinians will arbitrarily lose Medicaid coverage because of new burdensome and unnecessary paperwork requirements—not because of waste, fraud, and abuse. Past studies show that many who are eligible will fail to comply with the paperwork requirements as a result of shortening enrollment periods, more frequent redeterminations of eligibility, and other administrative gotchas.
It is not surprising that many low income people will be unable to complete the paperwork because they often are overwhelmed by poverty, less educated, disabled or ill. Similar to unscrupulous health insurance companies that deny covered claims knowing that many insureds are unlikely to appeal, the House bill imposes unnecessary, burdensome hurdles knowing that many eligible Medicaid recipients cannot comply.
The So-Called Work Requirements Sound Appealing But Do Not Work
The bill also imposes work requirements on adults between 18-64 years old receiving Medicaid expansion coverage. Why the work requirements apply only to Medicaid expansion and not traditional Medicaid recipients is never explained.
Like most Americans, I believe working is beneficial both for those able to work and society. Research, however, shows Medicaid work requirements are unnecessary and counterproductive. Data consistently shows only 2% of those on Medicaid are able to work or do not qualify for an exemption. Here are the numbers: 64% of Medicaid recipients are working; 28% would continue to be exempt because they are disabled, ill, caregivers, or in school; and 4% are unable to find work or retired. This is a made-up problem.
Many times more people eligible for Medicaid are unable to complete the paperwork than the few on Medicaid who are able to work and not working. States that previously imposed work requirements lost ten to thirty times more eligible Medicaid enrollees than recipients able and not working. For example, in Arkansas, 25% of Medicaid recipients failed to complete the paperwork hurdles. In New Hampshire, which tried to improve upon Arkansas’ requirements, 66% failed.
Millions of uncontroversial recipients—the working poor, disabled, caregivers, and students — will lose Medicaid coverage because they cannot navigate the bewildering bureaucratic paperwork. Moreover, studies show that work requirements did not achieve their purpose: they did not increase the number of recipients who worked.
At a town hall on Friday, May 30, Iowa Senator Joni Ernst repeated the claim that the House bill cuts 1.4 million illegal adult immigrants off Medicaid. In fact, no federal funds pay for Medicaid for undocumented adults. Seven states cover some undocumented adults with their own state funds. This costs Americans in the other states (including North Carolina) nothing. This is a fake issue to distract from the bill’s devastating harm to low-income Americans – something Ernst made clear when she defended the Medicaid cuts by telling her constituents, “Well, all of us are going to die.”
The House bill’s massive cuts are arbitrary, cruel, and harmful to our state’s health and economy. However, four Republican Senators can stop the bill’s cuts by voting no. Please call our two Senators, Thom Tillis and Ted Budd, and tell them the bill’s cuts are bad for North Carolina.
